Issue of contract that is made in more than a language

It is quite common in Cambodia that the contracts are made in both Khmer and English languages for transactions within which a party is not Cambodian or the parties are not Cambodians but their business transactions are carried on in Cambodia. Notwithstanding the parties try their best to convey the their agreement into contracts in different languages or versions, there may be cases where the discrepancy incurs and in the worse scenario there is dispute arising from such discrepancy.

In case where the parties foresee the above said issue, the parties mostly select one language to prevail the other languages in case of discrepancies. For example, if the parties conclude their contract in Khmer and English languages and if they select Khmer version as the prevailing one, they will state clearly in their contact that in case of discrepancy between English and Khmer texts, the Khmer text will prevail over the English one. Hence, when there is dispute among the parties, the contract in Khmer version will be used as the basis for the dispute resolution.

The problem incurs when the parties fail to select the language for their contract or in the case where they state in the contract that the two languages are equally valid; and then, there is discrepancy among those languages. What is the solution for this case? Under the Code of Civil Procedure of Cambodia, Article 5, provides that Khmer language must be the official language of the courts. Accordingly, documents submitted to courts or admitted as evidences by courts of Cambodia must be in Khmer language. If the parties fail to select the language for their contract and submit the dispute to courts of Cambodia, it is more likely that the courts use the contract in Khmer language as basis to render their decisions.

To solve problem arising from discrepancy between the contracts in different languages, parties should select the language for their contracts.

Published by Kanharith Nop

Kanharith Nop obtained a Degree of Doctor of Laws (Comparative Law) from Nagoya University, Japan in March 2013. His research interests and areas of practices include corporate law, employment and labor laws, contract laws and laws on securities of obligations.

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